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Friday, June 4, 2010

OECD sec-gen: No double-dip recession

LJUBLJANA: The world should not slip into double-dip recession despite austerity measures in some major economies, the head of the Organisation for Economic Cooperation and Development said on Tuesday, June 1.

"No, I do not see a double-dip, I do not see a recurrence of the recession," OECD Secretary-General Angel Gurria told a news conference when asked if such a recession could happen again, given budget cuts in many countries.

The OECD is a group of free market democracies that is expanding its membership of 31 mostly developed market economies to include an increasing number of emerging economies, such as Slovenia, which was formally approved last week.

Gurria said latest indicators show there is a chance that low growth and high unemployment could persist for years which can only be prevented by necessary policy changes.

"What we see in the medium term, let's say 5, 7 years, is a relatively low level of growth, a relatively high level of unemployment and relatively high budget deficits. ... What can change this projection? Well, policies," he said.

"After we have stabilised the financial system, after we have plotted a medium- and long-term fiscal plan, we have to have also medium- and long-term structural policies so that the recovery is sustainable".

He also said the euro zone's help package to its indebted member Greece should calm the jittery markets.

"Considering that the total debt of Greece is about 300 billion (euros), 110 billion on the table is an enormous amount of money and it should give peace of mind," Gurria said. - Reuters